Background: Patients with type 2 diabetes are at increased risk of cardiovascular events, and there is an associated economic burden attached to this risk. We conducted a retrospective claims database analysis to evaluate incremental cardiovascular costs in diabetic versus non-diabetic patients hospitalized for a cardiovascular event. Methods: Patients hospitalized for a cardiovascular event between January 1, 2001 and June 30, 2005 were identified from a large US managed-care population. Diabetic patients were identified by evidence of type 2 diabetes in the 12 months prior to the index hospitalization. Direct medical costs and resource use - including inpatient expenditures (for the index and first recurrent hospitalizations), as well as outpatient, laboratory, and pharmacy expenditures (during the 3-year follow-up period) - were determined for patients with or without diabetes. Results: Of the 29,863 patients identified with a cardiovascular hospitalization, 5,501 patients (18.4%) had a history of diabetes in the pre-index period (mean age, 57.8 years; 42.1% female). The overall mean follow-up period was 22.8 months. The incidence of subsequent cardiovascular events in the first year of follow-up was significantly higher for patients with diabetes compared with non-diabetic patients for all types of cardiovascular events except angina. Compared with non-diabetic patients, patients with diabetes had similar mean direct medical costs per patient for the index cardiovascular hospitalization ($17,435 versus $16,917; P = 0.09), and the first recurrent cardiovascular hospitalization ($18,488 versus $17,481; P = 0.2), yet higher mean total direct medical costs per patient for cardiovascular events during follow-up years (Year 1: $8,805 versus $6,982; Year 2: $13,860 versus $10,056; Year 3: $16,149 versus $12,163; all P ≤ 0.0002). The cost difference between diabetic and non-diabetic patients remained significant after adjusting for age, gender and other potential confounders in multivariate regression analysis. The mean (SD) total period of inpatient cardiovascular hospitalization after 3 years of follow-up was 3.3 (12.4) days for patients with diabetes compared with 1.8 (5.8) days for non-diabetic patients (P < 0.0001). Conclusion: Diabetic patients hospitalized for a cardiovascular event incur higher costs for cardiovascular care than their non-diabetic counterparts. This analysis of the incremental cardiovascular cost and resource use provides the basis for greater accuracy and precision when modeling the economic value of initiatives aimed at reducing cardiovascular morbidity in patients with diabetes mellitus.